Significant change to the country’s labour politics . . .
Starting in 2021, Vietnam will permit the formation of ‘worker representative organizations’ (WROs) not affiliated with the state-led Vietnam General Confederation of Labour (VGCL). This is a significant change in the way Vietnamese labour politics currently operate. Under the New Labour Code, Vietnamese workers will be able to make internal decisions at the organizational level without first consulting with the VGCL. For example, workers may decide on issues of internal labour regulations, salary schemes, or performance management policies. Notably, WROs will not be considered unions. Only the state-sanctioned VGCL is legally regarded as such, and legislated by a different law, the Trade Union Law.
Impacts domestic and foreign workers and employers . . .
This freedom to associate, along with other provisions given under the New Labour Code, will significantly impact how both domestic and foreign workers and employers operate in Vietnam. The amendment process for the New Labour Code took nearly four years and is the culmination of commitments Vietnam made under the CPTPP, EU-Vietnam FTA, and ILO Convention. The right to organize and to collectively bargain is a crucial part of the new generation of free trade agreements that strive, as the CPTPP’s name suggests, to be both comprehensive and progressive. In August, the European Union, for the first time, partially retracted Cambodia’s right to preferential trade treatment citing its failure to respect human and labour rights.
Canada’s interest in the new law . . .
The EU’s reaction to Cambodia and the New Labour Code in Vietnam are strong signals that provisions in this ‘new generation’ of trade agreements are being taken seriously, and failure to uphold them will result in negative consequences. In 2019, the Government of Canada allocated a part of Employment and Social Development Canada’s budget to ensuring members of the CPTPP uphold the commitments they made on labour standards and will be looking to Vietnam next year to see that it fulfills the labour commitments it agreed to under the CPTPP. For Canadian corporations looking to Vietnam, 2021 will mean brushing up on practices to ensure they comply with all the provisions of the country’s New Labour Code.